MGTO 231 Human Resources Management

MGTO 231Human Resources Management The Importance of HRM Dr. Kin Fai Ellick WONG

Personnel vs. HRM • Personnel Department vs. Human Resource Management • Are they the same? • If no, what are the differences? • How come there are two names? • You will know the answer at the end of this class…

Outline • Business Strategy • Strategy and HRM • Strategic HR Choices • Importance of strategic HR Planning

Business Strategy • What is a strategy • Text book definition: The company’s long-term plan for how it will balance its internal strengths and weaknesses with its external opportunity and threats to maintain a competitive advantage • Simply speaking: A plan that is expected to make an organization adaptive and competitive • Simplest speaking: A plan to make money

Business Strategy • Example of strategic choices • Defender vs. Prospector • Exploitation vs. Exploration • Quality vs. Quantity • Focused vs. Diversified

Examples • Defender vs. Prospector strategy • A defender strategy (保守) • Conservative, prefer to maintain a secure position in relatively stable product or service areas • Not so looking to expand into new territory • Attempting to protect market share from competitors; not to engage in new-product development • Low risk, stable return

Examples • Defender vs. Prospector strategy • A prospector strategy (急進) • Aggressive, emphasize growth and innovation • Looking to expand into new territory • Attempting to engage in new-product development • Failure is regarded as “normal” • High risk, high return

Examples • Exploitation vs. Exploration • Exploitation • Seeking to improve the current version of product • Incremental improvement • Exploration • Seeking to have breakthrough in product development • Dramatic changes in the fundamental concepts or architect of a product

Examples • Exploitation vs. Exploration • Examples • Game software • EA Sports vs. Nintendo • Game lists of EA • NBA Live 1996 • NBA Live 1997 • NBA Live 1998 • NBA Live…. 07 • http://www.easports.com/ • How about Nintendo? • Made in Wario (key control) • Mawaru Made in Wario (key + motion control)

Examples • Exploitation vs. Exploration • Examples • TV industry • Panasonic vs. Samsung • Panasonic: Improving the quality of CRT TV • Samsung: Switching to LCD TV • Mobile phone • Keep improving 2G vs. Switching to 3G

Examples • Exploitation vs. Exploration • Similar to prospector, exploration is high risk high return • Anyone remember this product by NOKIA

Examples • Quality vs. Quantity • Examples • Car industry • Rolls Royce vs. Toyota

Examples • Focused vs. Diversified • Examples • Hey, would you give me an example?

Personnel vs. HR • For organizations with a personnel department • Top-management often regard various HR functions (e.g., recruitment, pay, training) as IRRELEVANT to business strategies; • Their managers usually do not involve in the strategic planning and decision-making of organizations

Personnel vs. HR • For organizations with a HR department • Top-management often regard various HR functions (e.g., recruitment, pay, training) as a part of business strategy; • Their managers usually play an important role in strategic planning of organizations

The role of HR managers • They have to decide policies and actions that are consistent with their goals! • There are many strategies they can choose in various HR contexts • The choices may be different for different business strategies

Strategic HR Choices

Strategic HR choices • Managers or top-management have to decide policies and actions that are consistent with their goals! • There are many strategies they can choose in various HR contexts • The choices may be different for different business strategies

Some strategic HR Choices • Work Flows • Efficiency  Innovation • Control  Flexibility • Explicit job description  Broad job classes • Detailed work planning  Loose work planning

Staffing • Internal recruitment  External recruitment • Supervisor makes hiring  HR makes hiring • Fit in with firm’s culture  Skill and qualification • Informal hiring  Formal hiring

Separations • Inducing voluntary retirement  Layoffs • Hiring freeze  Recruitment as needed • Continuing support after termination  Letting them fend for themselves • Preferential rehiring  No preference

Performance appraisal • Customized appraisals  Uniform appraisal procedures • Multiple-purpose appraisals  Control-oriented appraisals • Multiple inputs (peers, subordinate) Supervisory input only

Training and development • Individual training  Team training • Job-specific training  Generic training • Buy skills with higher wages  Make skills at lower wages

Compensation • Fix pay  Variable pay • Job-based pay  Individual-based pay • Seniority-based pay  Performance-based pay • Centralized pay decisions  Decentralized one

International management • Create global company culture  Adapt to local culture • Rely on expatriates  Rely on own country nationals • Repatriation agreement  No formal repatriation • Universal company policies  Country-specific company polices

Choices of HR strategies • No HR strategy is “good” or “bad” in and of itself • Depend on situation context • Fit between the strategies and organizations

Importance of strategic HR planning • Encourage proactive behavior • Vision, active, anticipation • Translating the strategic plans into actions • A good HR planning makes strategic HR choices that fit the overall organizational strategies

A good HR planning • Fits organizational strategies • Fits environments

Conclusions • HRM is at a strategic level • Managers can formulate HR functions in a way that facilitate business strategies • It is a matter of fit between the HR choices and (1) business strategies, and (2) environments

MGTO 231 Human Resources Management